The week ahead is "prime time" for earnings season, with major American companies and sensational stocks due to put up or shut up. As these companies report their results for the latest quarter, they will either offer their shareholders vindication for hanging in there or a feeling of betrayal. Among the most notable reporters on the week with something to prove, Apple (AAPL), Facebook (FB), Caterpillar (CAT), Boeing (BA), Zynga (ZNGA) and Amazon.com (AMZN) among others. Earnings season has allowed stocks to break away from macro-drivers and show off alpha if they got it. This week will certainly continue that trend, with the economic data that is due on the soft side.
Week Ending July 19
SPDR S&P 500 (SPY)
SPDR Dow Jones (DIA)
PowerShares QQQ (QQQ)
A disappointing week for the NASDAQ was highlighted by disappointments at Google (GOOG), Intuitive Surgical (ISRG) and Microsoft (MSFT). It caused the PowerShares QQQ to diverge from the modest increases posted by the SPDR S&P 500 and the SPDR Dow Jones Industrial Average. Bad news was not limited to the NASDAQ though, with a notable disappointment at Coca-Cola (KO) causing some concern about this week's report by PepsiCo (PEP). The greatly anticipated report from Apple will likewise dominate and drive the NASDAQ this week; though the direction remains unknown today, it seems the company's EPS result could be soft but there remains the possibility of a new product announcement like for instance a watch of some sort.
THIS WEEK'S ECONOMIC REPORT SCHEDULE
Economic Data Point
Senate Examines Sequestration
EIA Petroleum Status - Crude Oil Inv.
SEC Examines Dodd-Frank
It was amazing that the individual stock news outweighed the very high profile testimony of Federal Reserve Chairman Bernanke last week. This week's economic schedule will be much more subdued, giving the floor to the corporates even more.
Still, the week offers several key housing data points that could confirm the bad news reported last week in Housing Starts. The Existing Home Sales Report especially carries weight this week, though not much change is expected by economists. Still, the existing home market is much more important than the new home market, which often gets more attention. New Home Sales are seen increasing modestly, but the economic data point will be overshadowed by the individual reports of the homebuilders this week, with major names including industry leader PulteGroup (PHM) due to report. Speaking of putting up or shutting up, the valuations in this group have received their first true test of the recovery lately due to concern about the impact of rising mortgage rates on activity.
Several key manufacturing measures are set for release as well this week, including the PMI Manufacturing measure and Durable Goods Orders. We will also hear from major reporting regions, with data due from Federal Reserve Banks of Richmond and Kansas City. So the market will have plenty of significant data from important sectors of the economy to weight.
The Chicago National Activity Index for June could confirm the bad news received last week from the Leading Economic Indicators Index, which was unchanged in the last month of the second quarter. With economists across Wall Street lately cutting their GDP forecasts for the quarter, every June measure will either confirm that caution or rebuke it, and the investment community will be paying attention.
HIGHLIGHTED EPS REPORTS
Six Flags Entertainment
Sirius XM Radio
Cliff's Natural Resources
Helmerich & Payne
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